Empirical Research on Refinancing Pecking Order of Domestic Listed Companies
|School||Beijing Materials Institute|
|Keywords||Listed company Pecking order theory Refinancing preference|
Financing structure refers to the composition of different financing methods andtheir proportional relationship, in the late 1970s, the formation of the pecking ordertheory is considered one of the most influential theories of company financing structureresearch. Under asymmetric information, the key point of the theory is that companyprefers to endogenous financing, followed by the debt financing, finally the equityfinancing. In fact, the status of financing in some of the more mature western capitalmarkets is consistent with the pecking order theory.China’s Securities Market grow well since 1990s, but it’s significantly differentfrom that of Western developed countries, one of the most prominent is that China’slisted companies in the re-financing are more dependent on external equity financing,with a strong preference for equity financing. This un-normal financing way leads to poorefficiency of resources allocation.Based on the pecking order theory, this paper discussed and studied the phenomenaof refinancing order in our country’s listed companies are inconsistent with the peckingorder theory. This paper used a combination of comparative analysis and empiricalresearch methods. Firstly, the paper reviewed the theory of financing preference;followed by the second chapter focus on the re-financing development process andcurrent status of listed companies, analyzed the causes and problems of equity financing.Then the third chapter through the introduction of EPS and ROE indicators to measurethe efficiency of refinancing verified the pecking order theory’s guiding practice for listedcompanies in our country from an empirical aspect. The fourth chapter verified thepecking order theory’s applicability in our country’s capital market from an empiricallyaspect, and compared the effects of three refinancing methods.Based on the analysis of four charpters, and considered the current capital marketsituation in our country, the fifth chapter put forward to some methods to improve thecurrent refinancing structure, and constructively proposed“pecking order”sequence forour country’s listed companies, in order to enhance the efficiency of allocation resourceof capital market. The final chapter summarizes the analysis of the shortages and futureresearch directions of this paper.